India’s largest telecoms operator Bharti to invest $600m in rural expansion in Africa‎

Bharti Airtel, India’s largest telecoms operator, Thursday reported it intends to invest US$600 million in expansion of its mobile network in rural areas. The plans for expansion will be undertaken in Nigeria, through Bharti Airtel’s newly acquired subsidiary, according to the Economic Times reports.


In June, Bharti Airtel made an acquisition investment for the assets of Kuwait Telecoms firm, Zain, based in Africa. The deal was sealed in the same month with the Indian giant telecoms firm gaining control of Zain Africa’s assets from its Kuwait parent, the Zain Group, in a deal that was pegged at around US$10.7 billion. With that acquisition successful, Bharti Airtel subsequently sought to expand and grow the African business, taking over Zain Africa’s operations in about 15 African states, out of which included Nigeria Malawi, Burkina Faso, Ghana, Kenya, Sierra Leone and Uganda.
Bharti Airtel’s Chief Executive Officer and joint managing director, Manoj Kohli, disclosed in the announcement that the company plans to invest heavily in rural telephony in Nigeria and additionally introduce a corporate social responsibility scheme that will see it set up schools, aimed at providing free quality education to disadvantaged children in rural communities.


He reiterated that the Indian telecoms firm intends to become a partner in Nigeria’s growth and as such plans to work with the country’s government to spread the telecoms networks deep into the country, exploring all possible corners of its geography. Bharti Airtel expects to introduce the Airtel brand across its new units by October 2010.


Bharti has said it aims to have 100 million subscribers and $5 billion a year in revenue in Africa by 2012/13 and is likely to mount a serious challenge to MTN's position as market leader in Nigeria. A new undersea fibre optic cable from Europe to Nigeria went live last week, providing 10 times the bandwidth capacity of the existing cable. The Main One cable is expected to herald rapid network expansion and falling costs for service providers, as well as increased competition and pressure to pass those savings on to consumers.


Nigeria, Africa's most populous nation, with 140 million people, has overtaken South Africa to become the continent's biggest mobile telecoms market with around 76 million active mobile subscribers and competition there is heating up. The Nigerian arm of Africa's biggest phone operator, South Africa's MTN(MTNJ.J), said last month it had signed loan agreements worth $2.2 billion to fund expansion, as it gears up for increasing competition from Bharti Airtel.


7 July 2010.